Md. Racing Commission rejects Jockey Club plan

Maryland's two major thoroughbred tracks may not host live racing next year — potentially jeopardizing the Preakness Stakes — after the state's racing commission on Monday rejected a plan to drastically curtail the racing schedule at Laurel Park and



With support from members of the thoroughbred industry, the commissioners unanimously rejected a proposal from the track's owners to run only 47 racing days, about one-third this year's schedule. Commissioners argued that that such a truncated racing season would effectively kill the horse-racing industry.

That means there's no racing schedule in place at all for next year, including for the Preakness, the second leg of racing's Triple Crown and a Baltimore tradition that's typically so profitable it helps support other racing in the state for the rest of the year.


"It's a very, very sad day for us to be effectively shutting down racing at all," the commission's chairman, Louis J. Ulman, said before the panel's vote. "But 17 days at Laurel and 30 days at Pimlico is not racing in Maryland."

The fate of the tracks and live thoroughbred racing in Maryland has been subject to several twists in recent weeks, and after the commission meeting, some industry boosters expressed hope the state would intervene or that a new owner would take over the tracks.

The Canadian real estate company MI Developments and the U.S. casino operator Penn National Gaming, which jointly own the track operator, the Maryland Jockey Club, could submit another plan. Or they could appeal the commission's decision in court.

Officials with MI Developments and Penn National declined to comment after the meeting Monday.

The Jockey Club proposed running 17 days of live racing at Laurel and a 30-day meet around the Preakness at Pimlico, much to the ire of many thoroughbred horsemen and breeders who packed the contentious three-hour Maryland Racing Commission meeting.

Officials with MI Developments and Penn National described that proposal as a "stopgap" measure to be put in place through at least the spring of 2011 while they work with the state's thoroughbred industry to devise a long-term plan for its operations.

"We are anxious to roll up our sleeves to come up with a long-term viable plan for racing here in the state of Maryland," Steven T. Snyder, senior vice president of corporate development at Penn National, told the commission.

Some horsemen and breeders expressed hope that new owners would buy the tracks. While the Jockey Club has said repeatedly that the tracks are not for sale, Ulman and others noted that several bidders had vied for Laurel and Pimlico during a bankruptcy auction earlier this year before MI Developments purchased the properties.


John Franzone, a longtime commission member, said after the meeting that state officials should "seriously look" at the eminent-domain law authorizing the state to seize the tracks. In 2009, the General Assembly passed a law granting the state that authority in the wake of the bankruptcy of the Jockey Club's then owner, Magna Entertainment Corp. Such a step was considered a last-ditch option to ensure the survival of the Preakness.

Officials with the governor's office could not be reached to comment.

Horsemen and breeders called on the commission to reject the Jockey Club's proposal, arguing that a more robust plan should be hatched to ensure the industry's survival.

"Racing in Maryland is not done," said Dr. Tom Bowman, veterinarian and president of the Maryland Horse Breeders Association.

Plans for Laurel and Pimlico have already gone through several variations in recent weeks. Most recently, Frank Stronach, chairman and founder of the Jockey Club's majority owner, MI Developments, pledged to maintain a 2011 racing schedule at the tracks that's similar to this year's season, which features a combined 146 days of live racing.

That pledge was a reversal from the Jockey Club's initial proposal to eliminate live racing at Laurel Park and operate only a 40-day meet at Pimlico. That initial plan was unveiled after voters approved a ballot measure allowing a slot-machine casino at nearby Arundel Mills mall, dooming the Jockey Club's chances of eventually winning the right to operate slots in that county.


Penn National had entered into a joint venture to own and operate the Jockey Club in anticipation of slots' possibly going to Laurel Park instead of the mall. Under the deal, Penn National owns 49 percent of the Jockey Club's racing operations.

Snyder, of Penn National, said the joint venture's five-member board, including Stronach, considered "hundreds" of possible racing schedules before the board approved the 47-day racing schedule Monday morning. Any decisions regarding the Jockey Club's racing operations require the board's unanimous approval.

"Unfortunately, we are left with no alternatives right now," he said.

But some commission members chastised MI Developments and Penn National for not having a year-round plan for racing at the two tracks.

"You guys don't flat out give a damn," commissioner David Hayden said.

Richard Hoffberger, president of the Maryland Thoroughbred Horsemen's Association, said he was disappointed that Stronach apparently didn't stand by his pledge. Hoffberger said he thought he had reached a handshake agreement with Stronach to keep the status quo at Laurel and Pimlico for at least another year. Hoffberger and Stronach had a brief run-in at a Kentucky horse auction earlier this month.


"I got the feeling that Frank was going along with his business partner," said Hoffberger, who said he called Stronach in Austria during the commission meeting. "He said he still wants to race. If it were up to Frank, he would race."

Stronach couldn't be reached for comment.

In the end, Hoffberger said, the commission had no choice but to reject the short racing schedule at the two tracks. "It's a death by 100 bullets or a death by one bullet," Hoffberger said. "What's the difference?"

Some slots casinos have opened already in Maryland. Even with a portion of the slots revenue augmenting race purses and funding capital improvements at the state's tracks, the Jockey Club has said that financial support is not enough to sustain its business. The Jockey Club said Laurel Park has been losing $4 million to $7 million annually for several years.

So far, the Hollywood Casino in Perryville, owned by Penn National, has generated nearly $943,000 for the purse account and $337,000 for the track improvement fund since the Cecil County slots parlor opened in late September.

With the possibility of a reduced thoroughbred racing schedule, Senate President Thomas V. Mike Miller said this month that "there will be a move to change the purse structure" in the General Assembly that reconvenes in January. "It's no good to have huge purses" if the racetracks have laid off people and scaled back operations, he said.


Under the law, purses and breed funds receive 7 percent of slots revenue, while racetrack renewal gets 2.5 percent.

Sun staff writer Julie Bykowicz contributed to this